WEBVTT - Big Tech’s AI Debt Is Raising Investors’ Eyebrows 0:00:02.520 --> 0:00:12.880 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:12.920 --> 0:00:16.760 from coast to coast with Caroline Hide in New York 0:00:17.040 --> 0:00:20.160 and ever though in San Francisco. 0:00:21.120 --> 0:00:23.919 This is Bloomberg Tech coming up. All eyes on the 0:00:23.960 --> 0:00:26.800 AI data center debt debate. We discussed stocks to watch 0:00:26.800 --> 0:00:30.080 as big tech piles on big debt. Plus investors pull 0:00:30.240 --> 0:00:32.680 three and a half billion dollars from bitcoin ets in 0:00:32.800 --> 0:00:36.120 November as the underlying asset is its worst performance since 0:00:36.120 --> 0:00:39.320 the twenty twenty two collapse, and the CEO of Ironq 0:00:39.760 --> 0:00:43.440 joins as the company's new partnership to develop quantum enabled 0:00:43.520 --> 0:00:46.760 drones for national security rolls out. But first let's check 0:00:46.800 --> 0:00:49.400 in on these markets. We are on tenter hooks. We 0:00:49.479 --> 0:00:51.640 of course have a shortened week, a holiday week as 0:00:51.640 --> 0:00:54.920 we anticipate Thanksgiving in the United States, and still anxiety 0:00:54.920 --> 0:00:58.000 bruise about which AI names to be holding onto into 0:00:58.040 --> 0:00:59.360 the end of the year or to be selling. And 0:00:59.440 --> 0:01:01.000 video just turned to the red. But I'm looking at 0:01:01.040 --> 0:01:03.160 the Nazak one hundred holding onto games more than two 0:01:03.200 --> 0:01:06.959 percent higher. Broadcom charges higher, Alphabet does two Bitcoin, though 0:01:07.040 --> 0:01:09.840 not charging higher. We got some reprieve over the weekend 0:01:10.040 --> 0:01:11.760 of course at Treys twenty four to seven, but we're 0:01:11.760 --> 0:01:14.280 still down one and a half percent. Eighty six thousand 0:01:14.640 --> 0:01:17.160 is where we currently see. We'll dive into bitcoin and 0:01:17.200 --> 0:01:18.840 crypto a little bit more in the show, but move 0:01:18.840 --> 0:01:21.160 on to the individual movers because a new record high. 0:01:21.280 --> 0:01:24.720 Alphabet's up another five percent on the day, So much 0:01:24.800 --> 0:01:29.000 love for Gemini three. Meanwhile, I'm seeing the socks doing well. 0:01:29.040 --> 0:01:31.440 Broad Coms on the higher side. In fact, a lot 0:01:31.440 --> 0:01:34.320 of the Magnificent seven names across the board of training 0:01:34.400 --> 0:01:36.800 higher Teza for example. But want to shine to like 0:01:36.880 --> 0:01:40.119 one particular tech stop right now. Amazon is in the green, 0:01:40.560 --> 0:01:45.319 but we're sticking really with documents. More broadly in AI reviewing, 0:01:46.000 --> 0:01:50.120 as Bloomberg has that Amazon's data center footprint has been 0:01:50.120 --> 0:01:53.880 growing tremendously amid the AI boom. One key to this 0:01:54.200 --> 0:01:56.320 is the use of co location facilities around the world. 0:01:56.520 --> 0:02:00.000 This rented space to stash servers made up a fifth 0:02:00.040 --> 0:02:02.920 are the company's cloud capacity last year. The person who's 0:02:02.920 --> 0:02:05.320 been going through all the documents, as Bloomberg's Matt Day 0:02:05.320 --> 0:02:08.800 who covers Amazon, Matt talk us through why this is 0:02:09.080 --> 0:02:13.000 pretty amazing. Nine hundred data centers being own, managed, or 0:02:13.040 --> 0:02:15.120 indeed least or co leased by Amazon. 0:02:16.080 --> 0:02:18.920 Most people know that Amazon's cloud business is enormous, but 0:02:19.000 --> 0:02:22.600 this kind of shows us exactly how enormous. Right, Most 0:02:22.680 --> 0:02:25.720 cloud computing companies don't tell you exactly where their facilities are, 0:02:25.760 --> 0:02:27.639 and one thing they really don't talk about is where 0:02:27.680 --> 0:02:30.680 they rent space. So these documents we reviewed, you know, 0:02:30.680 --> 0:02:33.200 as you said, it's about a fifth of aws's computing 0:02:33.280 --> 0:02:36.520 power as of last year was provided by co location facilities. 0:02:36.560 --> 0:02:38.720 These things are all over the world. There's hundreds and 0:02:38.800 --> 0:02:41.440 hundreds of them. Just another way to underline how much 0:02:41.480 --> 0:02:44.040 both they've grown during the AI boom and just how 0:02:44.080 --> 0:02:45.680 wide their leaders in cloud computing. 0:02:45.840 --> 0:02:49.559 Because Matt, we kind of think about Amazon, we think Virginia, 0:02:49.919 --> 0:02:53.440 We think enormous data centers that they own, that they operate, 0:02:53.480 --> 0:02:56.640 and that's the majority. But why have they needed to 0:02:56.680 --> 0:02:59.760 build out these third parties, these co locations so much 0:02:59.760 --> 0:03:01.720 more so? There's a couple of reasons. 0:03:01.720 --> 0:03:03.120 I mean, one is when they set up shop in 0:03:03.160 --> 0:03:06.120 a new market, sometimes they're not confident enough in the 0:03:06.200 --> 0:03:08.360 ramp of demand that they want some options, right, go 0:03:08.440 --> 0:03:10.680 rent some space, you know. Sometimes it's a speed to 0:03:10.720 --> 0:03:14.000 market thing. You can expand faster and seeing a poor 0:03:14.000 --> 0:03:16.760 buy renting space and you can by developing or purchasing 0:03:16.880 --> 0:03:19.680 land and developing it yourself. So it's really a way 0:03:19.720 --> 0:03:22.480 for them to get flexibility and the particularly internationally, which 0:03:22.520 --> 0:03:25.760 is where we understand most of their collos are. 0:03:25.919 --> 0:03:28.280 It's a deep dive. I urge people to go read it. 0:03:28.360 --> 0:03:30.720 Matt Day, thanks for bringing us the latest on Amazon's 0:03:30.760 --> 0:03:33.400 build out when it comes to AI infrastructure. But the 0:03:33.440 --> 0:03:35.800 AI buildout is meant that, in fact, big tech firms 0:03:35.840 --> 0:03:37.920 are taking on a lot of debt at the moment, 0:03:38.240 --> 0:03:41.640 but the sale of issuance, the scale of it might 0:03:41.720 --> 0:03:44.560 risk overwhelming buyers and it could weaken the credit market 0:03:44.600 --> 0:03:47.200 on both sides of the Atlantic. That's according to analysts. 0:03:47.360 --> 0:03:49.560 Let's debate all of that with j Hatfield, a CEO 0:03:49.800 --> 0:03:53.880 and CIO and Infrastructure Capital Advisors. You actually own Amazon 0:03:53.880 --> 0:03:56.200 in one of your funds, and I'm interested more broadly 0:03:56.200 --> 0:03:59.400 about what you've thought about how companies are paying for 0:03:59.480 --> 0:04:01.720 the build up in AI data centers right now? Jake, 0:04:01.800 --> 0:04:02.600 does it give you pause? 0:04:03.960 --> 0:04:06.880 Well, I think there's one area where people are concerned, 0:04:07.080 --> 0:04:11.080 and that's because parts we've been saying for a while 0:04:11.120 --> 0:04:13.360 that there's no bubble in the market as a whole, 0:04:13.680 --> 0:04:17.839 but I do think there's bubbles in parts of the market. 0:04:18.760 --> 0:04:24.719 Obviously crypto, but even with open Ai, they traded twenty 0:04:24.720 --> 0:04:27.640 five times revenue versus seven times for the mag eight 0:04:28.400 --> 0:04:32.240 and three times for the market, and that concerned about 0:04:32.279 --> 0:04:36.200 open and they have one point four trillion of obligations, 0:04:36.720 --> 0:04:40.440 so that concerned is leaking into other companies like Oracle, 0:04:41.160 --> 0:04:44.400 But generally most of the commitments are coming from the 0:04:44.480 --> 0:04:48.200 magate who have tremendous not just cash flow but free 0:04:48.240 --> 0:04:52.560 cash flow, are great businesses, so we're not overall worried. 0:04:52.640 --> 0:04:54.760 And also I just point out it's not so much 0:04:54.800 --> 0:04:57.000 people think they're going to default. It just applying man 0:04:57.680 --> 0:05:00.000 Oracles CBS is like one hundred and ten over, which 0:05:00.080 --> 0:05:04.960 is not that attractive even for investment grade. So just 0:05:05.040 --> 0:05:07.719 that there has been a lot of issuance that means 0:05:07.760 --> 0:05:10.640 that you have to pay more to issue. So I 0:05:10.640 --> 0:05:13.600 don't think it's a big credit concern, But there's an 0:05:13.600 --> 0:05:18.640 open issue about really whether open Ai, if you will, 0:05:19.120 --> 0:05:23.560 will really be able to beat out Google and other 0:05:23.600 --> 0:05:26.320 incumbents in the long run, and whether that's a little 0:05:26.360 --> 0:05:27.040 bit of a bubble. 0:05:27.200 --> 0:05:29.640 We're looking at credit default swaps of Oracle right now, 0:05:29.680 --> 0:05:32.000 which have almost been used as a hedge. To your point, 0:05:32.160 --> 0:05:34.800 many aren't thinking Oracles about the default, but there have 0:05:34.920 --> 0:05:37.320 been placed perhaps on watch negative by some of the 0:05:37.320 --> 0:05:39.960 big rating companies and people just thinking that this is 0:05:40.000 --> 0:05:43.320 a way in which you perhaps protect yourself to the downside. 0:05:43.360 --> 0:05:46.440 I'm interested, Jay, therefore, on how we've seen Mazooho calling 0:05:46.480 --> 0:05:49.200 it out today saying that many have been shorting supplies 0:05:49.240 --> 0:05:53.320 to open Ai while buying into suppliers of Google for example. 0:05:53.600 --> 0:05:55.120 How long can that tension last? 0:05:56.520 --> 0:05:58.960 Well, we think it's probably that trades are getting a 0:05:59.000 --> 0:06:02.240 little bit tired. You notice said Oracle is bouncing back, 0:06:03.080 --> 0:06:07.599 you know, the stalk with fifty percent higher or thirty 0:06:07.600 --> 0:06:10.520 three percent higher if you will, Yeah, fifty percent upside 0:06:10.560 --> 0:06:13.680 from here, just you know, three weeks ago, three four 0:06:13.680 --> 0:06:16.440 weeks ago. So I think that trade's probably fully done. 0:06:16.440 --> 0:06:20.160 Microsoft is getting getting smacked and is pretty cheap, so 0:06:20.360 --> 0:06:23.160 open Aye is not dead yet. It's just that there's 0:06:23.440 --> 0:06:28.159 clearly competition to the retail side, so that I think 0:06:28.240 --> 0:06:31.800 is mostly priced in. Also, keep in mind that we 0:06:31.839 --> 0:06:37.960 had normal market weakness after earning season, the market was 0:06:38.000 --> 0:06:40.360 fully valued. We had a seven thousand target. We were 0:06:40.440 --> 0:06:45.920 just shy of that. Maggie was slightly overvalued by our models. 0:06:46.480 --> 0:06:50.480 So some pullback and readjustment is normal this time of year, 0:06:50.600 --> 0:06:51.640 right after earning season. 0:06:52.240 --> 0:06:54.600 I mean, the hundreds of millions of chutching PTUs as 0:06:54.600 --> 0:06:57.640 would definitely say that everyone AI is anything but dead. 0:06:57.760 --> 0:07:00.600 But the anxiety, in many ways, this is built at 0:07:00.600 --> 0:07:03.000 the same time as we saw warriors in the market 0:07:03.000 --> 0:07:05.440 about not getting a rate cut in December. How much 0:07:05.560 --> 0:07:08.480 is this is macro? How much of this is actually 0:07:08.520 --> 0:07:09.360 specific to AI? 0:07:10.920 --> 0:07:13.360 Well, you know, I would have said, actually incorrectly, I 0:07:13.360 --> 0:07:17.400 guess that the FED was not a big overhend hanging 0:07:17.440 --> 0:07:20.520 on the market. But you did see Friday that the 0:07:20.600 --> 0:07:24.480 Williams comments, which are important the head of the New 0:07:24.560 --> 0:07:27.680 York FED is a permanent member of the FOMC. His 0:07:27.800 --> 0:07:31.680 dubbish comments kind of turned everything around. I think too much. 0:07:31.920 --> 0:07:34.040 I think it's at best fifty to fifty we get 0:07:34.040 --> 0:07:37.640 a cut, but because of Williams, will at least get 0:07:37.800 --> 0:07:41.720 a dubvish pause. And all that really matters is that 0:07:41.800 --> 0:07:45.400 we keep the tenure round four percent. To keep the 0:07:45.480 --> 0:07:48.960 tenure round four you need the terminal rate to be 0:07:49.000 --> 0:07:52.640 about three. You can track that on a terminal MIPR, 0:07:53.360 --> 0:07:56.320 and so as long as investors think there will be cuts, 0:07:56.360 --> 0:07:58.160 they don't have to be In December. 0:07:57.920 --> 0:08:00.240 Jay, I want to ask you a question of out 0:08:00.640 --> 0:08:04.400 really and who is driving this market because has this 0:08:04.480 --> 0:08:07.720 sell off washed out some of the long only long 0:08:07.840 --> 0:08:10.680 term investors in the AI trade or has this been 0:08:10.680 --> 0:08:13.720 more quants, Has this been more retail, Has this been 0:08:13.760 --> 0:08:16.240 more short term investors that have seen some of the 0:08:16.280 --> 0:08:17.200 downside of Lake. 0:08:18.200 --> 0:08:23.000 Well, it's absolutely blown up the momentum. Short term traders, 0:08:23.000 --> 0:08:26.640 whether the institutional or retail, are funds, you know, like 0:08:26.720 --> 0:08:30.160 we hold Amazon and IICAP, they've actually been outperforming because 0:08:30.160 --> 0:08:33.200 they're more conservative. We have few tech stocks there, but 0:08:33.320 --> 0:08:37.319 more dividend stocks, small caps of doing well like our 0:08:37.400 --> 0:08:40.719 s cap fund third stocks. So we actually like these 0:08:40.800 --> 0:08:44.000 kind of markets because people have focused on cash flow 0:08:44.040 --> 0:08:49.160 and earnings and valuation typically outperform and they're really dumb 0:08:49.160 --> 0:08:53.040 stuff like crypto treasury companies that are no longer needed 0:08:53.080 --> 0:08:57.560 because we have ETFs get washed out. So really healthy 0:08:57.679 --> 0:09:01.080 pull back with most of the really damage coming to 0:09:01.200 --> 0:09:05.360 the to the investors that don't pay attention to valuation. 0:09:06.120 --> 0:09:08.960 I just want to go full circle HEREJ, because we 0:09:09.160 --> 0:09:11.480 end we started on Amazon, we end on Amazon. I 0:09:11.520 --> 0:09:13.720 know you hold Amazon, and we just got breaking news 0:09:13.720 --> 0:09:16.000 that AWS is going to be building and deploying the 0:09:16.040 --> 0:09:19.880 first ever AI and high performance computing purpose built infrastructure 0:09:20.280 --> 0:09:22.680 for the US government new investment nearly one point th 0:09:22.720 --> 0:09:25.360 we giggaats they're talking about fifty billion dollars here J, 0:09:26.120 --> 0:09:28.000 Is that how you want to see Amazon committing to 0:09:28.000 --> 0:09:28.840 the AI trade? 0:09:29.840 --> 0:09:34.840 Absolutely, we think that they are still the leader in 0:09:34.880 --> 0:09:37.680 the cloud service business. But what we think is missed 0:09:37.679 --> 0:09:40.520 and why we're bullish on Amazon beyond just the normal 0:09:40.559 --> 0:09:43.640 EI trade, is that they have this gigantic retail business 0:09:43.640 --> 0:09:47.800 we all know, and they now have professional management that's 0:09:47.880 --> 0:09:52.800 working to make it adequately profitable. So that's creating tremendous 0:09:52.880 --> 0:09:55.280 earnings growth away from the AI trade, and we think 0:09:55.280 --> 0:09:58.880 it's underappreciated. You know, it includes advertising, which is really 0:09:58.920 --> 0:10:03.720 a cost offset. So that's the biggest reason we're bullish 0:10:03.760 --> 0:10:07.640 on AWS and Amazon because they do have a little 0:10:07.640 --> 0:10:09.880 bit of a disadvance because they're an incumbent and everybody 0:10:09.920 --> 0:10:12.400 else is pouring money into cloud service business. They have 0:10:12.480 --> 0:10:17.960 strong competitors there, but an underappreciated retail business with a 0:10:17.960 --> 0:10:19.720 lot of upside on profitability. 0:10:19.920 --> 0:10:22.440 J Hatfield, I've structed Capital Advisors. Great to have some 0:10:22.480 --> 0:10:25.240 time with you. Wish you are very happy Thanksgiving And 0:10:25.360 --> 0:10:28.280 while coming up US commerce sextorly, Howard Utnick says the 0:10:28.360 --> 0:10:31.199 decision for in video chip sales to China, whether they're 0:10:31.240 --> 0:10:35.840 on President Trump's desk more on H two hundred's being debated. Next. Meanwhile, 0:10:35.960 --> 0:10:37.800 let's check in on what Ali Baba is up to. 0:10:38.080 --> 0:10:42.000 Shares had been surging today the ADRs, in particular why 0:10:42.880 --> 0:10:47.239 well Quinn The app drew more than ten million downloads 0:10:47.240 --> 0:10:49.240 in the week after its relaunch. This is all about 0:10:49.280 --> 0:10:52.200 its generator of AI offering as well. From New York 0:10:52.320 --> 0:10:53.160 disciply by Tech. 0:10:57.040 --> 0:11:00.440 Do you want to sell China some chips and keep 0:11:00.480 --> 0:11:04.800 them using our tech and our tech stack, or do 0:11:04.880 --> 0:11:07.040 you say to them, look, we're not going to sell 0:11:07.040 --> 0:11:09.440 you our best chips. We just going to hold off 0:11:09.440 --> 0:11:11.280 on that and we're going to compete in the AI 0:11:11.400 --> 0:11:14.680 race ourselves. So that is the question. It's in front 0:11:14.679 --> 0:11:17.400 of the President. He's going to decide. It's a really 0:11:17.440 --> 0:11:20.640 really interesting question. He's got all the information, he's got 0:11:20.679 --> 0:11:23.160 lots and lots of experts talking to him, and he's 0:11:23.160 --> 0:11:25.040 going to decide which way he wants to go forward. 0:11:25.400 --> 0:11:28.640 US Commas Secretary Howard Ladings meeking of bluembog surveillance earlier today, 0:11:28.679 --> 0:11:31.640 as President Trump wighs whether or not to allow the 0:11:31.640 --> 0:11:34.440 sales of Nvidia AI chips to China, for all, Blue 0:11:34.480 --> 0:11:36.720 Vagazine and Tech editor Mike Sheppard joins us with the 0:11:36.800 --> 0:11:40.360 nuance that this is potentially H two hundreds that are 0:11:40.400 --> 0:11:43.360 being debated, more sophisticated than H twenties that already we 0:11:43.440 --> 0:11:46.000 understand they would allow to be sold with a fifteen 0:11:46.040 --> 0:11:50.000 percent cut. But even that hasn't got legal sign off. 0:11:50.880 --> 0:11:53.920 Well, that doesn't have legal sign off, and this falls 0:11:54.000 --> 0:11:57.000 short of the Blackwell design chips that have been bandied 0:11:57.000 --> 0:11:59.640 about just a few weeks ago as the President was 0:11:59.679 --> 0:12:04.680 prepared to meet with his Chinese counterpart, Hiesipang. Ultimately that 0:12:04.880 --> 0:12:07.440 kind of a transaction never even came up in the 0:12:07.520 --> 0:12:11.680 conversations between the two leaders. And yet the whole broader 0:12:11.800 --> 0:12:14.560 issue of whether Nvidia would be able to sell a 0:12:14.640 --> 0:12:18.760 more sophisticated version of its AI chips to China really 0:12:18.800 --> 0:12:22.320 hasn't gone away completely. And we had our exclusive last 0:12:22.320 --> 0:12:25.400 week Cara that you saw showing that the President and 0:12:25.480 --> 0:12:28.880 his advisors are deliberating this question, and it appears that 0:12:28.920 --> 0:12:31.360 they are settled on whether or not to allow the 0:12:31.520 --> 0:12:34.160 H two hundred, which is of the Hopper design and 0:12:34.480 --> 0:12:37.959 still a very fast and very powerful AI chip. If 0:12:38.000 --> 0:12:40.440 they allowed this sale, it would be a big change 0:12:40.440 --> 0:12:44.200 in US export control policy with respect to China and 0:12:44.400 --> 0:12:48.000 artificial intelligence. The Trump administration and its predecessor of the 0:12:48.000 --> 0:12:51.920 Biden administration view China as the top us competitor in 0:12:51.960 --> 0:12:56.720 this area of artificial intelligence, and granting them China that 0:12:56.920 --> 0:12:59.080 is the technology to be able to advance in this 0:12:59.200 --> 0:13:02.120 race is a very sensitive question here in Washington. 0:13:02.440 --> 0:13:06.439 Yeah, how does it break down on Hawk lines, on 0:13:06.520 --> 0:13:09.600 those in the administration and those around the administration, because 0:13:09.720 --> 0:13:11.960 there is this ongoing tussle as to whether or not 0:13:12.040 --> 0:13:14.680 in Video, which of course itself wants access to China, 0:13:14.840 --> 0:13:18.520 would just be allowing domestic competitors to brew if they're 0:13:18.600 --> 0:13:19.360 unable to sell. 0:13:20.640 --> 0:13:22.680 Well, Kar, I'm glad you asked that, because that really 0:13:22.800 --> 0:13:25.360 is the debate right now, and Jensen Wang is very 0:13:25.440 --> 0:13:28.680 much at the center. He has been arguing that, look, 0:13:28.720 --> 0:13:31.559 if we want to compete with China, globally in the 0:13:31.679 --> 0:13:35.160 race for artificial intelligence dominance, we need to be able 0:13:35.160 --> 0:13:37.600 to compete inside China too, and that means we will 0:13:37.640 --> 0:13:41.280 have to sell some of our technology in the Chinese market, 0:13:41.400 --> 0:13:45.320 which happens to be the world's largest market for semiconductors 0:13:45.400 --> 0:13:47.719 right now. Now, that is an argument that is one 0:13:47.800 --> 0:13:51.240 some favorite inside the administration. You heard during the interview 0:13:51.360 --> 0:13:54.880 this morning between our colleagues Lisa Bramowitz and Danny Berger 0:13:55.000 --> 0:13:58.960 and the Commerce Secretor, Howard Lutnik. The Secretary articulated that 0:13:59.160 --> 0:14:01.959 himself that there is is attention and a debate. There 0:14:02.000 --> 0:14:05.080 are others who are more hawkish on the national security side, 0:14:05.080 --> 0:14:08.760 though Caro, who view granting China any sort of access 0:14:08.800 --> 0:14:12.680 to this sophisticated technology simply paves the way for creating 0:14:12.760 --> 0:14:17.000 more risk for the US. It would grant Beijing's authorities, 0:14:17.000 --> 0:14:22.600 including the military and intelligence apparatus, access to more sophisticated 0:14:22.880 --> 0:14:26.680 technology and artificial intelligence that they currently than they currently 0:14:26.720 --> 0:14:29.800 have right now, and it could allow for more surveillance 0:14:30.120 --> 0:14:33.880 and other uses in advanced weaponry that the US would 0:14:33.960 --> 0:14:35.560 just as soon not see happen. 0:14:36.000 --> 0:14:39.360 Bloombags mac Shephard. We appreciate you joining today, thank you 0:14:39.400 --> 0:14:41.800 so much. Meanwhile, the President Trump is busy. He's also 0:14:41.920 --> 0:14:45.120 escalating his attacks on the media, saying television networks shouldn't 0:14:45.120 --> 0:14:47.480 be allowed to expand. Now in a post on truth 0:14:47.480 --> 0:14:49.720 Social Trump's side to concerns about the potential growth of 0:14:49.840 --> 0:14:53.680 left leaning news outlets. This in response to a Newsmax 0:14:53.720 --> 0:14:57.120 report claiming that FEC Commissioner Brennan kar was moving to 0:14:57.120 --> 0:14:59.840 give TV networks great to reach to the proposed merger 0:14:59.880 --> 0:15:03.320 of Next and Tegna for multebricate HORTWN in this world 0:15:03.320 --> 0:15:05.280 of m and A has been most lucas sure, so 0:15:05.480 --> 0:15:09.400 called left leaning news outlets bearing the brund to the attacks. 0:15:09.480 --> 0:15:11.520 But does this mean we're not going to see the 0:15:11.640 --> 0:15:14.200 m and A that we're anticipating in the industry right now? 0:15:15.000 --> 0:15:19.480 Always hard to interpret what President Trump's posts on social 0:15:19.520 --> 0:15:22.560 media actually mean as it pertains the policy. I mean, 0:15:22.680 --> 0:15:25.800 there's also those are different types of consolidation, right You've 0:15:25.840 --> 0:15:30.400 got the continued potential sale of Warner Brothers Discovery, where 0:15:30.400 --> 0:15:32.840 you have Comcast, which owns NBC, one of the networks 0:15:32.840 --> 0:15:35.360 that he talked about is a suitor. You have Paramount, 0:15:35.360 --> 0:15:38.240 which owned CBS, which he exempted because I think he 0:15:38.440 --> 0:15:40.880 likes them as a potential suitor. And then Netflix, which 0:15:40.920 --> 0:15:43.160 does an owner broadcast network, and then you've got the 0:15:43.160 --> 0:15:46.360 consolidation in the local television station space, which is what 0:15:46.480 --> 0:15:49.880 Brendan Carr has been calling for. But Brendan Carr sees 0:15:49.920 --> 0:15:52.880 this almost as a check against the networks because the 0:15:52.920 --> 0:15:56.200 more power that the station owners have, they can actually 0:15:56.440 --> 0:15:58.880 potentially win in negotiations with the networks. So I'm not 0:15:58.880 --> 0:16:01.480 really sure whose side he on here. You assume that 0:16:01.520 --> 0:16:04.400 Brendan Carr is pushing the agenda that he is because 0:16:04.440 --> 0:16:07.120 Trump supports him, because that has generally been his MO. 0:16:07.600 --> 0:16:09.880 But I guess we'll find out more as this sort 0:16:09.880 --> 0:16:11.080 of plays out in public. 0:16:11.200 --> 0:16:13.240 Well, the big playing out that we're all watching and 0:16:13.480 --> 0:16:16.040 initial bids are in is for Warner Brothers. Discovery, which 0:16:16.040 --> 0:16:18.760 owns CNN, is part of that. Yeah, where do we stand. 0:16:18.800 --> 0:16:20.400 I mean, you have a great piece out of the Weekend, 0:16:20.440 --> 0:16:21.920 as you always do in this one, really just showing 0:16:21.920 --> 0:16:25.440 how much Netflix is sort of bowing to potential changes 0:16:25.440 --> 0:16:27.040 in its own business model if it was to win. 0:16:27.320 --> 0:16:32.280 Yeah, So Netflix, Comcast, and Paramount all submit bids on Wednesday, 0:16:33.360 --> 0:16:37.120 excuse me, Thursday, they've done a very good job of 0:16:37.320 --> 0:16:38.560 keeping the content of. 0:16:38.520 --> 0:16:39.520 Those bids quiet. 0:16:39.560 --> 0:16:42.040 We've tried to get some information others have as well. 0:16:42.440 --> 0:16:45.680 I mean we know sort of the general framework, we 0:16:45.760 --> 0:16:49.360 just don't know the pricing. Expectations are that the Warner 0:16:49.400 --> 0:16:53.000 Brothers Discovery Board will review those bids, or has reviewed 0:16:53.000 --> 0:16:56.480 those bids. They'll go back to the three companies and say, 0:16:56.520 --> 0:16:58.960 you know, we need more here, we need less there. 0:16:59.240 --> 0:17:02.080 And it is also so my understanding is still open. 0:17:02.200 --> 0:17:04.480 So if someone else wanted to come in and make 0:17:04.480 --> 0:17:07.000 an offer, they are still available, They're still able to 0:17:07.040 --> 0:17:09.120 We're not in an exclusive period where someone else can't 0:17:09.160 --> 0:17:09.840 jump in yet. 0:17:10.320 --> 0:17:13.760 We'll see how that continues to be picked away at 0:17:13.880 --> 0:17:15.800 by some of the key reporters. Lukashaw will be strong 0:17:15.840 --> 0:17:18.840 among them, I'm certain. So keep eyes on NIOS bids. 0:17:24.160 --> 0:17:27.119 Quantum computing firm IONQ, well, it's just announced the partnership 0:17:27.320 --> 0:17:31.800 with Heaven Aerotech to develop quantum enabled drones as a 0:17:31.840 --> 0:17:34.480 move that will boost iron Qu's presence in national security sector. 0:17:34.520 --> 0:17:37.439 Let's discuss this plan with IMQ CEO Nicolo de Massi. So, 0:17:37.600 --> 0:17:41.879 why does quantum tech need to be introduced to drones? Niccolo. 0:17:43.240 --> 0:17:46.960 Well, it's part of our broader field actually of driving 0:17:47.000 --> 0:17:50.960 the quantum Internet and our full solutions of quantum computing, 0:17:51.080 --> 0:17:54.280 quantum networking and quantum sensing into every theater. 0:17:55.040 --> 0:17:55.439 So we have. 0:17:55.560 --> 0:17:59.719 Quantum sensors that work on submarines for inertial navigation and 0:17:59.800 --> 0:18:01.959 on ships on the top of the ocean. We of 0:18:01.960 --> 0:18:05.280 course have quantum networks in quantum computers on the land, 0:18:05.480 --> 0:18:09.439 and we're building quantum economies in various jurisdictions and states 0:18:09.440 --> 0:18:12.200 around the world. And of course we've also got our 0:18:12.200 --> 0:18:16.280 satellite signals intelligence business up in space, and so drones 0:18:16.320 --> 0:18:19.399 were the missing piece of the four theaters. Where we 0:18:19.440 --> 0:18:23.600 now have quantum networking, quantum computing, and quantum sensors in 0:18:23.680 --> 0:18:25.680 partnership with Heaven up in the air. 0:18:26.640 --> 0:18:29.199 What will it help Heaven do? And why are you 0:18:29.280 --> 0:18:33.199 going with Heaven when it's still undergoing field evaluation with 0:18:33.480 --> 0:18:34.360 the US military. 0:18:35.760 --> 0:18:39.560 Well, look, it's a partnership that is fantastically pioneering given 0:18:39.600 --> 0:18:43.000 the range of their drones, their hydrogen powered. Obviously this 0:18:43.040 --> 0:18:46.920 doesn't prohibit us from broadening out our engagement with the 0:18:47.240 --> 0:18:51.080 drone ecosystem. At the same time, you know, they're very 0:18:51.200 --> 0:18:53.480 tech forward as an organization, and so we love the 0:18:53.520 --> 0:18:56.880 fact that they want to pioneer with us quantum networking 0:18:56.880 --> 0:19:00.560 communications between drones in their fleet. They want to work 0:19:00.560 --> 0:19:03.479 with us on our quantum computers to help, you know, 0:19:03.600 --> 0:19:08.359 not only coordinate their fleet, but also enact surveillance and 0:19:08.520 --> 0:19:13.200 early signal detection using our computers in conjunction with satellite 0:19:13.240 --> 0:19:16.639 imagery that we can provide, plus of course imagery that 0:19:16.680 --> 0:19:19.320 they can provide. And then, last but not least, of course, 0:19:19.359 --> 0:19:24.280 they're interested in embedding our quantum sensors and positioning, navigation 0:19:24.400 --> 0:19:28.560 and time advances and technologies into their drone platform. So 0:19:29.320 --> 0:19:30.840 you know, where there's a will is a way, right, 0:19:31.119 --> 0:19:33.359 And the reality is we consider ourselves to be a 0:19:33.400 --> 0:19:37.680 pioneering company. Thirty years making we have led every aspect 0:19:37.840 --> 0:19:40.879 of quantum computing and quantum networking and quantum sensing for 0:19:41.119 --> 0:19:43.720 thirty years. We're the first public company in the space, 0:19:43.800 --> 0:19:46.440 the first machines that turned on, the first machines on 0:19:46.480 --> 0:19:50.159 the public cloud, and today we're extending that capability to 0:19:50.200 --> 0:19:52.840 another theater, which we find tremendously exciting. 0:19:53.760 --> 0:19:56.480 There, of course, pioneering and hydrogen. You're saying you're pioneering 0:19:56.520 --> 0:20:00.520 by being first public company really focused on quantum, What 0:20:00.600 --> 0:20:02.679 actually are you doing for your partners right now, Niclo. 0:20:02.760 --> 0:20:05.920 Many understand the promise of quantum, but you say you're 0:20:05.920 --> 0:20:08.520 in the field with RQ FOURTE, with Q four D Enterprise, 0:20:08.560 --> 0:20:11.960 you're already working with AWS with AstraZeneca and video. You 0:20:12.000 --> 0:20:15.080 sort of say you're achieving twenty x performance results, performance 0:20:15.119 --> 0:20:15.919 results of what. 0:20:17.520 --> 0:20:20.359 Yeah, So the Astrosenic in partnership that you're referring to 0:20:20.560 --> 0:20:24.320 is I think the most powerful example of what we 0:20:24.440 --> 0:20:28.960 call quantum advantage that's ever been generated in history. And 0:20:29.000 --> 0:20:30.760 so I qus proud of the fact that we have 0:20:30.880 --> 0:20:34.919 pioneered every aspect of the quantum revolution, both commercially. In 0:20:34.960 --> 0:20:37.800 the lab, we're the first company to achieve what's called 0:20:37.960 --> 0:20:40.400 four nines of fidelity ninety nine point nine to nine 0:20:40.440 --> 0:20:43.320 percent fidelity, which means that our cubits are the best 0:20:43.359 --> 0:20:45.359 in the world and the highest quality and are the 0:20:45.440 --> 0:20:48.639 most powerful. And so the twenty x speed up is 0:20:48.680 --> 0:20:53.240 turning almost a month of classical computation using a GPU 0:20:53.359 --> 0:20:56.080 data center into just a day and a half. And 0:20:56.119 --> 0:20:58.520 in fact, if you double click on that outcome, we 0:20:58.640 --> 0:21:00.920 actually have portions of the problem that we sped up 0:21:01.240 --> 0:21:05.280 by six hundred and fifty six times. The classical portions 0:21:05.280 --> 0:21:07.800 of the workflow obviously kind of bring down the average, 0:21:08.040 --> 0:21:10.920 but nevertheless, it's a tremendous example of what we're achieving 0:21:11.280 --> 0:21:13.760 in the pharmaceutical the health tech space, if you will, 0:21:14.320 --> 0:21:17.560 using our Forte enterprise systems. Now, our new computer that 0:21:17.600 --> 0:21:20.119 we just announced two months ago in September twelve, Tempo 0:21:20.720 --> 0:21:23.879 is two hundred and sixty million times more powerful than Forte, 0:21:24.240 --> 0:21:26.199 and so you can imagine that we'll be turning not 0:21:26.280 --> 0:21:28.639 just a month of computation into a day and a half, 0:21:28.880 --> 0:21:31.960